Most Resales Are Bubble-Era PurchasesPosted on Wednesday, February 10th, 2010 at 4:20am.
Most of the resales are from that bubble period.
- 20 active listings were purchased before 2003
- 12 actives were new construction
- 3 actives were purchased after 2007
Is it "normal" for almost 2/3rds of resale inventory to consist of homes purchased during a single 5-year period? Your blog author has no idea. This is not the way real estate markets are typically measured. Even a well-documented answer would probably boil down to "it depends."
It's beyond the scope of this post to explain any trends behind why these bubble-era buyers are getting out now. For some of them, the headline issues of the day are surely factors – job loss, loan problems, being-upside-down problems. But for others, you'll see some move-up buyers, mixed in with all the old standards – death, divorce, downsizing and job transfer. We just don't know the mix.
It's worth noting that 35 active listings emanating from all the sales during the 2003-2007 period represents a small percentage of all the homes traded during that time. These may have greater significance for the current market than as a sign of distress among bubble-era buyers as a group.
In fact, almost none of the active listings appear to be in default or bank-owned. According to a local "foreclosure" list posted the other day by Blake Roberts on his blog, we see just 2 bank-owned properties on offer (1026 Duncan and 617 6th), one with a fresh NOD (new construction at 529 18th) and one with a series of NODs and trustee's sale notices that just hit the MLS recently (3613 Pine).
There would be some distress for some of these bubble-buying sellers, though, even if they do make a deal.
For example, 2 recent sales (new escrows) in town, 3113 Laurel and 2603 Palm, were from 2007 and 2006, respectively. (They're not reflected on this chart, since they're not active listings.) Both pencil out to lose money.
With MB living in 2004 prices for now, 2005 purchases can't be expected to fare well upon sale, either.
Nearly a third (11 of 37) of these resales were purchased in 2003 and 2004, the 2 years for which there's some hope of recouping costs or, perhaps, making a little profit.
505 N. Dianthus
532 5th Pl
217 35th Pl
2920 The Strand
4320 The Strand
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